updated 10:35 pm EST, Fri December 4, 2009

Apple would get Lala engineers in bargain

(Update with Apple confirmation) Apple has already cemented its deal to buy Lala, multiple sources said Friday evening. One tip claimed the web-based audio startup not only agreed to a deal quickly but voluntarily offered itself to Apple through iTunes VP Eddy Cue due to short-term doubts about Lala's profitability. Apple itself purportedly sees Lala as a resource grab and is concerned more with getting engineers experienced in streaming music than for the actual Lala service.

The New York Times added that Lala's licenses to play and download music aren't transferrable and that Apple would have had to renegotiate if it wanted to keep a separate service running.

Separately, MediaMemo in its own leak has both corroborated the rumor and asserted that investors into Lala may have lost a significant amount of money given the valuation of the deal. Apple may have bought the young firm for as little as 50 cents per dollar invested, though one source said that value was "way off."

While Apple hasn't sent any immediate signals of its plans, the presence of 3G and Wi-Fi on devices like the iPhone and iPod has led some to believe that the company may eventually offer a "cloud" service that would stream owned tracks to a portable player rather than occupy valuable storage space. One early rumor had also pointed to a concept known as iTunes Replay that would provide a similar platform for videos.

Update: Apple has confirmed the deal but hasn't disclosed the terms or its plans.

Maybe they did

Apple will need a big a** data center if they want to enter the music subscription/streaming market, this buyout and the data center both fit in that plan.

Instead of a DRM based subscription service, Apple could opt for a streaming music system that works on all devices and doesn't need the dreaded DRM. Music would then simply be cached for off-line use.

It's a change

The pressure from the industry and customers can force Apple to adopt a subscription model, streaming seems a good option. Caching the music would eliminate the need for a constant internet connection.

Storing your music online should be a free service for .mac users, they pay enough already.